Seatini Uganda - Financing for Development/Tax Justice

Strategic objective: To promote fair and inclusive fiscal policies and strategies for revenue mobilisation, allocation and utilization for sustainable development.

Financing for development is about how domestic and international resources contribute to or undermine development. It includes issues around aid, trade, debt, international and national finance, domestic budget and global fiscal governance.

The challenges facing Africa including the EAC is how to equitably and sustainably mobilise resources in order to provide social services, infrastructure and for reinvestment. Currently at national level, there are efforts by government to increase domestic revenue through taxation. Internally generated revenues have increased from 54% in Financial Year 2005/2006 to 76.4% in Financial Year 2015/2016.

Seatini Uganda - Financing for Development/Tax Justice

Government has also undertaken a number of tax policy reforms in the areas of Double Taxation Agreements, Tax avoidance and tax evasion and incentives to limit illicit financial flows. In order to strengthen the capacity of the revenue authority Uganda has joined the Africa Tax Administrators Forum (ATAF). However, tax policy at national level is still skewered more towards attracting FDIs and is also still regressive in nature.

At the local level, although the decentralisation policy is intended to extend services nearer to the people, local governments still face a number of challenges. The funds from Central Government are still conditional and while they are mandated to collect local revenues, they still face challenges in mobilising local revenue which impacts on service delivery.

At EAC and continental level, there has been efforts to harmonize tax policies to avoid harmful tax competition in the region as well as strengthen tax administration and curb tax havens and illicit financial flows that deprive countries of the much needed revenue.

At global level, there are processes to address issues of tax governance and curbing of IFFs through the Base Erosion and Profit Shifting (BEPS) process under the OECD. There has also been debate around aid effectiveness on the one hand and ending aid dependence on the other and on the need to set up a fully- fledged UN inter-governmental tax body. Debate has also been centered on issues of debt restructuring, innovative financing and role of Public Private Partnerships (PPPs) in revenue mobilization.

Given the complexity of these processes and issues, there is still limited engagement by key stakeholders i.e. Policy makers, CSOs and government at all levels. At national level, SEATINI and other CSOs have engaged on tax policy reforms to ensure that revenue mobilisation, allocation and utilization is inclusive, equitable and fair. They have also enhanced the capacity of stakeholders to demand for accountability at national and local levels.

Seatini Uganda - Financing for Development/Tax Justice

At EAC level, there has been increased stakeholder engagements and campaigns around IFFs especially after the launch of the Mbeki report and on issues around the extractives sector and the Double Taxation Agreements. However there have been limited engagements of stakeholders at the global level especially in the OECD BEPS processes, the UN Tax debates and also issues around innovative financing and PPPs. Despite increased Uganda’s indebtedness recorded at 33.2% of GDP in 2014, and is set to rise as the government embarks on new projects, there is no monitoring frame work in place to assess the impact of debt funds. There is still limited stakeholder engagement on the debt issues which has far reaching implications on resource mobilization and the provision of social services.

Stakeholders’ capacity to engage on these issues will be critical to ensure fair and equitable resource mobilization, allocation and utilization at regional, national and local government levels. In the next five years, SEATINI will build on the achievements, structures and networks developed at national, regional and global level to address the existing challenges.

Key Result Area 1:

Capacity of citizens and stakeholders to demand for fair and inclusive fiscal policies, laws and practices enhanced.

Key Result Area 2:

Fiscal policies, laws and strategies that are fair, equitable and minimize financial outflows are in place and operational.

 

Startegic Focus/ Action:

  • Policy Advocacy
  • Alliance Building and Networking
  • Media Engagements
  • Capacity Building
  • Information Generation and Dissemination